Lake View Inc. a Pharmaceutical Supplier is planning either to make some drugs using their own resources to supply to their prospective health care providers or buy the drugs to supply to the health care providers. Considering the equation: TC= a + b(qt), the company is considering either to make or buy the drugs with an annual required quantity of 2,500. To use the company's resources the company will have to invest $7,500 and estimate to incur $4.00 per unit to make the make the drug. However, it is estimated that a supplier will supply the drugs at a cost of $9.00 per unit but the company must invest $1,500.00

1. How much will it cost the company to make or buy at the break-even quantity? . TO MAKE? TO BUY ?

2. At the annual required quantity, what would it cost the company to make or buy the drugs? TO MAKE? TO BUY?

3. Now graphically illustrate your answers from part "a" and "b". and explain what you would advise the company to do, and why?